City centre hospitality jobs at risk as more people work from home

Around 77,000 retail and hospitality employees could be forced to relocate or lose their jobs due to an increase in office staff working from home, a University of Sheffield study has revealed.

In collaboration with the universities of Nottingham and Birmingham, the researchers calculated that on average, people will be working roughly one more day a week at home than they were before the pandemic, which will likely mark a permanent shift.

This amounts to an estimated £3b loss for city centres in 2022, with the City of London set to see an estimated spending decrease of 31.6% this year and central Birmingham estimated to see a decrease of 8%.

As more businesses relocate to suburban areas, central hospitality venues will miss out on morning coffee sales, lunchtime sandwich deals and post-work happy hours.

The paper predicted that it will be unlikely that city centre pubs, restaurants and cafés – already squeezed by inflation and staff shortages – would move to suburban areas. Low population density would reduce profitability, as there would be fewer customers and employees, researchers said.

Dr Jesse Matheson, lead author of the paper from the University of Sheffield's department of economics, said: "Workers in retail and hospitality may also find that demand has shifted to locations to which commuting is too difficult, which means that supply may not be able to keep up with demand."

The study also warned that cultural changes could exacerbate existing inequalities between low and high-income earners, as the money being lost in city centres is expected to circulate in affluent suburbs, where many workers with disposable income live.

Co-author Paul Mizen, professor of monetary economics at the University of Nottingham, said: "This illustrates how sensitive retail and hospitality sectors are to changes in work location, affecting larger cities with commuting and tourist trade in particular."

Find out more about the study on the impact of city centre's here.